You’ve decided. You want to buy a house. Congrats. That’s awesome. It really is. I’m happy to help you from now until settlement too. But I need something from you mmmk? It’s called a “preapproval”. I once read a poll that said that couples are more reluctant to talk about their finances than their sex lives. Fortunately for anyone reading this, the underlying reasons for this is beyond the scope of this article. LOL.
There’s a few reasons buyers don’t want to get preapproved. One being that they think they’re good and it’s just a formality. Another being they don’t want their credit “dinged” until they find something. (this is especially true with those who have recently rebuilt their credit. Sometimes, people just hate talking about money with others. Below are a few things to consider to overcome this misguided reluctance and on your way to getting the home of your dreams!
Knowing How Much You Can Afford – I’ve have buyers in both situations. One where they think they can afford more, the other where they are sorely mistaken. In all these situations, KNOWLEDGE is POWER! The guidance from the lender ultimately will direct us in the right direction.
Not Wasting Any Time – A real estate purchase can be a lengthy process depending on what your criteria is. Trust me, it’s not that I don’t wanna waste my own time (although that would be preferable), it’s that it is very hard to go through all the excitement of looking for a home, browsing, finding the right one and then being told essentially “You’re not good for it, you’re too high a risk” by the lender. It frankly just pisses everyone off.
Selecting the Right Loan Program – More times than I can count, my lender partners can size up a borrower and find a great loan program for them which alters how we search for a home and write up an offer. Having this information before even finding the home is invaluable.
Discovery of Hidden Lending Issues – This is the one I think most are afraid of. If there’s any doubt in the lender’s mind, this is the one I usually have to work hard to uncover. This behavior originates from the same part of the brain that prevents people from getting regular check ups with their doctor. Often times, I remind my buyers that nothing happens in real estate for borrowers until the money arrives at settlement from the bank. If that can’t happen, there’s no sense in getting all riled up with the other fun (and sometimes stressful) aspects of a real estate transaction. Lenders can do amazing things and justify a ton of things to their underwriters (the people who really approve your loan) to get your loan through.
Overcoming Emotional Hurdles – This is a little more obscure one, but I remind my team all the time that if a buyer won’t get preapproved after they’ve insisted, a siren needs to go off. Not until they get a lender to look at their finances do they exit the “tire kicker” status of our clientele. Something amazing happens though when a preapproval is attained. The buyer has a clearer vision of what they can afford and adopt an “I can do this attitude”. It also ensures your agent that you’re serious about the process which means they are gonna be much more proactive. Hate to say it, but I have countless people who come out of the woodwork every year and never do anything because they’ve never gone through the necessary process to prepare for a home purchase.
Overall, my team and I will work with anyone who is serious and have the lenders to get the job done. Getting preapproved is not commensurate with a colonoscopy either. Any borrower who is somewhat organized can be preapproved in about 24 hours.
Any questions or need an excellent lender for either a purchase or refinance of an existing home, please reach out.